THE crucial billion-dollar “GAP rail project” is still firmly on schedule and budget to be commissioned in January next year, QR National chief executive Lance Hockridge says.
Speaking in Rockhampton yesterday after making an extensive tour of the recently listed coal hauler’s network, Mr Hockridge said the rail tracks in north central Queensland had been built to withstand tropical weather events and that the new Goonyella to Abbot Point line, albeit incomplete, had held up extremely well.
He was making his first comments after the company’s widely expected downgrade announcement on Thursday, which led analysts to predict the floods would cause it to miss its prospectus net profit target for this financial year by up to $70 million, or 21 per cent.
The existing line between Collinsville and the Abbot Point loader near Bowen was the least affected of all QR National’s lines.
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A big selling point in the offer document was the development of a new connection between that slightly under-used network and the heavily used Goonyella network, whose access to the Dalrymple Bay and Hay Point loaders near Mackay was blocked between Christmas and New Year by a derailment. The new line would have allowed producers to bypass the blockage.
Mr Hockridge said the expected damage bill of about $10m for the company was “a credit to the quality of the infrastructure” that QR National had acquired in its restructuring before the November 2010 float.
The likely bill was a lot lower than many people had predicted, he said. “I’d heard people talking factors of 10 and even factors of 100 times the amount we believe it will actually cost to repair.”
He conceded it would be some time before the line between Queensland’s southern coalfields and Brisbane via Toowoomba, which his company uses but does not own, was repaired. It does, however, own the badly damaged spur line between Xstrata’s Rolleston mine and the recently reopened Blackwater line further north that leads to the port of Gladstone.
It is understood that while almost all of QR National’s network was built to withstand a once-in-100-year flood, the Rolleston line was built merely to stand up to a once-in-20-year event.
“We’re investigating all the possibilities you’d imagine, to see whether coal can be trucked to other places served by rail,” Mr Hockridge said.
He noted that another planned (for 2015) but so far unbuilt joint-venture 215km track between Xstrata’s Wandoan mine in the Surat Basin and the existing Moura-Gladstone line would provide an alternative to some inland coalmines now reliant on the Toowoomba line.
QR National shares closed 4c lower at $2.78.